Bank of credit and commerce - Essay Example

At 1 London time that day (8 am in New York City), regulators in five countries marched into offices and shut them down. Around a million depositors were immediately affected by this action. On 7 July 1991, Hong Kong Office of the Commissioner of Banking (forerunner of the Hong Kong Monetary Authority) ordered to shut down Its business In Hong Kong on the grounds that had problem loans and the Sheikh of ABA Dhabi, the major shareholder of , refused to provide funds to the Hong Kong . Hong Kong was liquidated on 17 July 1991.

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In 2002, Denis Robert and Ernest Backups, former number three of financial clearing house , discovered that had continued to maintain its activities after its official closure, with microfiche’s of illegal unpublished accounts. [13] A few weeks after the seizure, on 29 July, Manhattan District Attorney Robert announced that a Manhattan grand Jury had Indicted , and Navy on twelve counts of fraud, money laundering and larceny. , who ad been Investigating for over two years, claimed Jurisdiction because millions of dollars laundered by the bank flowed through Manhattan.

Also, cited secret ownership of First American, which operated a subsidiary In New York City. Said that all of deposits had been fraudulently collected because the bank misled depositors about its ownership structure and financial condition. He described as “the largest bank fraud in world financial history. ” On 15 November, , and Navy were indicted on federal charges that it had legally bought control of another American bank, Independence Bank of Los Angles, using Saudi businessman as the puppet owner.

Just a month later, liquidators (, ) pleaded guilty to all criminal charges pending against the bank in the United States (both those lodged by the federal government and by ), clearing the way for formal American ?at the time, the largest single criminal forfeiture ever obtained by Independence and to make restitution to depositors. None of this was enough o rescue both banks, however; Independence was seized later in 1992, while First American was forced into a merger with First Union in 1993.

However, many of the major players in the scandal have never been brought to trial in American or I- courts. , for example, died in 1995. He was under indictment in the United States and I- for crimes related to , but Pakistani officials refused to give him up for extradition because they felt the charges were politically motivated. Even without this to consider, he’d been in poor health since suffering a stroke in the . Is still a fugitive as of 2011; at last report he was believed to be in Syria.

In 1992, United States Senators John Kerry and Hank Brown became the co-authors of a report on , which was delivered to the Committee on Foreign Relations. The scandal was one of a number of disasters that influenced thinking leading to the Public Interest Disclosure Act (PAID) of 1998. The report found that Clifford and his legal/business partner Robert A. Had been closely involved with the bank from 1978, when they were introduced to GUCCI by Bert Lance, the former director of he Office of Management and Budget, to 1991.

Earlier, was revealed to have been the puppet owner of National Bank of Georgia, a bank formerly owned by Lance before being sold back to First American (it had previously been an subsidiary before Lance bought it). Clifford and testified that they had never observed any suspicious activity, and had themselves been deceived about control of First American. However, the federal government and contended that the two men knew, or should have known, that controlled First American.